Tyson Foods Tops Expectations in Fourth Quarter

Nov.23.09 | About: Tyson Foods (TSN)

Tyson Foods Inc. (NYSE:TSN) reported a net loss of $1.22 per share for the fourth quarter of fiscal 2009. This includes a goodwill impairment charge of $1.50 per share in its Beef segment.

Excluding the one-time charge, quarterly earnings were 28 cents per share, compared to the Zacks Consensus Estimate of 26 cents and prior-year earnings of 13 cents per share.

Revenue for the quarter was flat year-over-year at $7.2 billion. Higher revenues in Tyson’s Chicken and Prepared Food divisions were offset by revenue declines in the Beef and Pork segments.

Sales in the Chicken segment came in 11% higher than the prior-year quarter, reflecting strong volumes and higher average sales price. The segment gained from its recent acquisitions and inventory reduction efforts.

Beef and Pork segments reported sales declines of 4% and 14% respectively, as volume gains in these segments could not fully offset the impact of lower average sales prices.

Tyson’s Prepared Foods division witnessed sales growth of 2% during the quarter. Lower average selling prices were more than offset by higher volumes in this business.

For the full year, Tyson posted earnings of 6 cents per share (excluding goodwill impairment charge), compared to fiscal 2008 earnings of 24 cents per share. Annual revenue of $26.7 billion was down by less than 1% compared to last year. The company witnessed higher volumes in all its divisions. However, lower average selling prices offset the volume gains for the fiscal year.

Tyson expects fiscal 2010 to be a better year than fiscal 2009, helped by strong operating performance at its Beef, Pork and Prepared Foods divisions. Also, the company is making operational improvements to maximize margins at its Chicken division.